Essay
Co-ownership in Land law and Equity
- Module
- Land Law
- Institution
- The University Of Liverpool (UoL)
It's an essay about co-ownership in land law and equity.
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This question requires consideration to be given to the means by which an impliedtrust can arise in a home for cohabitees. According to the Government Actuary’s
Department, there is a considerable increase in cohabiting couples and it predicted the
number to rise to 3 million in 2021, thus the need for some development in the area of
law protecting their rights in the event of a relationship breakdown. Cohabitees are
unique and distinct as compared to married couples and civil partners. Property law
extends greater protection to married couples and civil partners, as seen in the
Matrimonial Causes Act 1973 and the Civil Partnership Act 2004 to reorder property
rights. However, in relation to cohabitees, very few extensions in the law exists.
Parliament’s failure to legislate in this area has been widely criticized, including recently
by Lady Hale in Gow v Grant. As a result, in 2007 a reform for this area of law was
proposed in the Law Commission Report No 307 which devised a new financial scheme
solely for cohabitants which is entirely different from that would apply to separating
couples on divorce. Although the scheme would not offer cohabitees the same rights as
married couples, the proposed scheme specified that certain cohabitees should be
provided with financial remedies on separation or the death of one of the parties if they
made qualifying contributions to the relationship.
Consequently, Lord Lester introduced the Cohabitation Bill in 2008, largely
based on the 2007 Law Commission Report. Whilst the bill has had firm support from
Resolution and family lawyers generally, it also has some significant opponents notably
the legal academic Baroness Deech and the attorney general Baroness Scotland. Also,
Lord Henley of the Opposition stated that he was unable to support the bill because it
removed choice from individuals and that the bill would weaken the institution of
marriage. However, meantime Scotland in 2006 has implemented rules relating to
cohabitees through the introduction of the Family Law (Scotland) Act 2006. The UK took
this opportunity to research on the potential effects of the scheme. Nevertheless, coalition
government in 2010 have indicated that is no real possibility of the bill becoming law in
the foreseeable future. This means that cohabitees will be treated as unrelated individuals
under the law and have virtually no protection.
Thus, the common law has developed in an attempt to address the problem. The
position at the moment is represented by the decision in Stack v Dowden and Jones v
Kernott. It is argued at this point whether the comparative jurisdictions which exist in
countries like Scotland, Australia and New Zealand which has made much inroad into the
position of cohabitee be considered by the UK.
The common law position for cohabitants before Stack v Dowden relied on the
concept of resulting trust in order to determine the beneficial entitlements in a home on
relationship breakdowns. However, this approach is very narrow as it places too much
emphasis as to who paid what which turns it into a financial relationship. Clearly the last
thing that would come into the parties mind when they are setting up a family home is
what will happen when the relationship breaks down. Thus, Gardner and Davidson has
pointed out that it is artificial to analyse in terms of resulting trust, which presupposes
that cohabitees have comtemplated how contributions would return to each party.
According to Baroness Hale, the resulting trust is no longer an important tool as it only
has a residual value where the parties are in some sort of the commercial relationship
with each other. This is simply because their lordships are of the view that the focus of
resulting trust is purely financial. However, Lord Neuberger disagreed with this and
,argued that resulting trust produced certainty and structure. Also, William Swadling in his
article ‘The Common Intention Trust in the House of Lords : an opportunity missed’ was
of the opinion that a resulting trust had a fundamental value despite the critical
assessment made by Baroness Hale and Lord Hoffman in Stack v Dowden. Baroness Hale
was of the opinion that the law has to move away from Burns v Burns situation, because
even though there is no financial contribution, there still can be a beneficial interest, and
this should be the position. Also, cases like Gissing v Gissing and Pettitt v Pettitt was
based on the ‘solid tug of money’ which follows the resulting trust. However, the case of
Rosset attempted to provide early guidance for constructive trust. Nevertheless, Lord
Bridge in the House of Lords took the restrictive approach and shift the emphasis back to
financial contributions. It fails to take into account the economic inequality between men
and women, which in turn affects their respective ability to acquire property. This also
effectively places little emphasis on indirect contribution where such contributions can be
substantial. Modern cases has indicated that financial contribution does not really matter,
as indirect contributions should be taken into account, for example giving up a job.
Baroness Hale in Stack said social and economic condition must be considered in this
regard. Also, Baroness Hale and Lord Walker in Kernott said that this social and
economic condition makes it problematic for any enquiry to be made in relation to
resulting trust and hence made it an inappropriate remedy overall. This sentiment is also
showed by Lord Hoffman in Stack when he said a more fact based approach rather than
resulting trust should be the framework as it is both simple and it should be accessible.
Therefore, it was decided in Stack that constructive trust should be the basis for
quantifying and establishing beneficial interest in a family home and that resulting trust
should never be contemplated. This approach was further confirmed by the Privy
Council in Abbott v Abbott. Simon Gardner then seeks to characterise the constructive
trust as one that corrects the loss suffered when a person forgoes alternative opportunities
to achieve a desired result in reliance on another's representation. Hudson states that
constructive trusts are concerned with the destination of equitable interests where it
would be inequitable to depart from the parties’ common intention as to the allocation of
the beneficial interest. In order to establish constructive trust, it must be proved that the
legal owner and claimant must share a common intention that the claimant should have
some interest in the land, which intention is relied on by the claimant to their detriment.
Common intention can arise in a number of ways. The first being through express
discussions. Lord Bridge in Rosset laid down that this must arise at anytime prior to
acquisition or exceptionally at some later date if a later express agreement is made. The
express discussion can be for example, when the legal owner says to B, ‘this house is as
much yours as mine’. However, case law has shown that even when such a promise is not
genuine on the part of the legal owner, it can also be sufficient, as seen in Eves v Eves,
where the husband made an excuse to the wife for not putting her name on the legal title.
A similar scenario is also seen in Grant v Edwards. However, Gardner was of the view
that excuses cannot be taken to be evidence of common intention, as this would be a cast
iron evidence that the defendant did not intend his partner to acquire an interest in the
property. Despite that, Glover and Todd said that intentions should be viewed at
objectively, whether or not excuses would lead to reasonable persons believing it. Apart
from that, judges and academicians was of the view that cohabitation agreement or
, contract should be encouraged between cohabitees, so that if there is a breach, one can
sue under breach of contract since there is no law, for example property law governing
cohabitee.
Secondly, a common intention can also be inferred from direct contributions to
purchase price of property. In Rosset, only express discussions or direct contribution to
purchase price of property can establish a common intention. However, this approach is
very narrow and the distinction between constructive trust and resulting trust would be
blurred. Thus, the position is now more properly represented by Stack and Kernott where
a common intention can also be inferred from the parties’ entire course of conduct. Here
judges used the objective test stand from the outside to determine the subjective or actual
intention of the parties. Baroness Hale in Stack used the word ‘actual’ as a synonym for
‘express’, referring thereby to an intention the parties actually had. The whole point of
inferred intentions is that they are not express, and are inevitably to be spelt out of the
parties' actions or indirect conversations. Baroness Hale gave a nonexhaustive list of
relevant factors which would be used to infer intentions in her judgment in Stack v
Dowden. Other than this, Lady Hale in Kernott indicated that the court could, in
appropriate circumstances, find that the parties’ intentions as to their respective
proportionate shares had changed over time, resulting in a variation of their beneficial
interests. However, Lord Neuberger took the view that it is unlikely for the parties’
beneficial interest to change over time.
Apart from inferred common intention, Kernott has gone further than previous
cases in holding that in some instances it may be necessary for the courts to impute an
intention to the parties. Although in this case it was held that there was no need to impute
an intention because the parties’ intention did not change, imputation may still happen
where it is impossible to divine a common intention as to the proportions of interest that
are to be shared. An imputed intention is one which is attributed to the parties, even
though no such actual intention can be deduced from their actions and statements, and
even though they had no such intention. Earlier on in Stack, the majority including
Baroness Hale, Lord Hope, Lord Walker and Lord Collins has appeared to envisage the
imputation of intention. However, Nick Pista in his article Intention to Fairness and the
presumption of resulting trust after stack v dowden’ stated that there was little difference
between imputing and inferring. Baroness Hale and Lord Walker was also of the same
view. However, Lord Neuberger dissented on this point. His lordship distinguished
between inference and imputation. He viewed inference as the objective deduction of
actual intention and imputation as the attribution to the parties of an intention on the basis
of what they would have intended, even though they had no such intention. While an
intention could be inferred as well as express, it could not in his view be imputed. Rimer
LJ in Kernott has also nevertheless rejected the idea of imputation. His lordship
suggested that practitioners should steer clear of imputation and should not pin their
clients' hopes on the courts being persuaded to impose a decision that may be regarded as
subjectively fair but which, as at the same time, unprincipled. Imputation involves
concluding what the parties would have intended. Thus it means that judicial discretion
must be applied to ascertain the intention of the parties. This has however led to criticism
that this may be abuse of power by the judiciary. Nick Pista suggested in his article,
Ambulatory Trust and the Family Home: Jones v Kernott, that public law principles of
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